Quebec food court king MTY wants to hit grocery shelves

MTY Food Group wants to hit grocery shelves

MONTREAL • MTY Food Group Inc., the Quebec-based owner of quick service restaurants including TacoTime and Mr. Submarine, wants to start selling its products in grocery stores.

The company, founded by entrepreneur Stanley Ma, said Friday that its subsidiary, MTY Tiki Ming Enterprises, has signed a licence agreement with Produits Alimentaires Berthelet Inc. to market some of its products in retail stores in Canada. Berthelet is a food maker specializing in dehydrated food and liquids that sell under names such as McLean ice cream and Saucier sauce mixes.

The six-year deal covers three MTY brands, including Thai Express and two other brands to be determined at a later date. The company said the first products are expected to appear gradually in retail stores within the next six to nine months.

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Perhaps the most notable example of a restaurant company selling its food in grocery stores in Quebec is Les Rôtisseries St-Hubert, the province’s most popular chicken chain. The chain, which already offers its gravies and other foods in stores such as Metro, is spending $25-million to expand its existing food-making plant in Boisbriand north of Montreal to better serve what it sees as the growing ready-to-eat market.

MTY’s products won’t be ready-to-eat, company chief financial officer Eric Lefebvre said in an email interview. He said such foods would represent too many issues for the company to control, such as freshness while also representing direct competition for MTY franchisees.

“We’ll go for sauces on shelves, frozen products etc.,” Mr. Lefebvre said. “Hopefully, we’ll be able to match the products you get in the food court. This is one of the main challenges for the next few months.”

Mr. Lefebvre said that if MTY can’t match the taste and texture of a specific food court product for the version sold in the grocery store, the company will hold back on that item to avoid damaging the brand.

MTY on July 5 reported second quarter results of 28¢ per share, a 47% increase over the same period the year before. Revenue rose to $23.7-million from $18.6-million.

The company controls a network of 2,238 restaurants across Canada. It makes money by taking royalties from meal sales.

MTY shares rose 1.6% to close at $18.75 in trading on the Toronto Stock Exchange Friday. They’ve gained 22.5% since the start of the year.